British Pound: Locked in tight ranges against US Dollar – UOB

United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann report that the British Pound (GBP) remains confined within tight price ranges against the US Dollar (USD). Currently, GBP/USD is trading between 1.3475 and 1.3515, with intraday fluctuations observed. The analysts anticipate the Pound to trade within a broader range of 1.3440-1.3540 over the next 1-3 weeks after testing the 1.3540 level briefly.

In the longer term, they expect range-trading dynamics, with support levels at 1.3210/1.3160 and resistance at 1.3610/1.3655.

In a 24-hour timeframe, GBP briefly reached 1.3540 two days ago before descending to a low of 1.3488. When GBP was at 1.3500 during the early Asian session, it was noted that the price movements seemed to be part of a range-trading phase between 1.3475 and 1.3525. The analysts observed that their prediction of range-trading was accurate, despite GBP trading within a narrower range than initially expected (1.3475/1.3513). For today, they predict GBP will continue to trade between 1.3475 and 1.3515.

Looking ahead at a 1-3 week perspective, the analysts have maintained a slightly positive view on GBP since last Monday. In their recent analysis on Tuesday (11 Aug, price at 1.3510), they mentioned that while GBP could test 1.3555 based on prevailing momentum, a continued rise above this level appeared unlikely. GBP did surge briefly to 1.3540 two days ago and then retreated, closing at 1.3475 yesterday.

Although their 'strong support' level of 1.3460 has not yet been tested, upward momentum has largely dissipated. For now, they expect GBP to trade within a range, most likely between 1.3440 and 1.3540.